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Floating bridges: the disadvantaged position of fund-granting officers

Editor’s note: The author of this article, Nan Yizhi, already calls herself an “auntie”, but in my view, she is still young and full of vigor. Although she is young, she looks at problems with the eye of someone highly experienced. People in charity circles usually think that grant-making officers are in a privileged position, but she points out that because of the immaturity of fund projects and the governance problems of the foundations, these officers, like every link in the chain of the charity circle, are constrained by this imperfect industry, its institutional problems and its environment.

My choice of title may seem a bit pretentious. If the ones who hold the money are in a disadvantaged position, then what about those on the other side? But fund officials are indeed on the disadvantaged side. In order to prove this, first of all, we have to explain what fund officials do. In short, fund officials’ work is to help foundations find, nurture and invest in suitable projects. From the point of view of those being financed, we bring the resources, and especially the money. From the angle of the foundations, we are the ones who achieve their social ideals. From the point of view of society as a whole, we are bridges connecting projects and funds.

It is hard to be a bridge, especially when the land on both ends of the bridge is not stable. As a fund official, on my left bank there are limited mature and effective projects. Therefore, a large amount of resources and time has to be devoted to nurturing a promising agency. On my right bank, the goals and visions of the grant-making foundations are still unclear. So fund officials’ work is always stuck in probing basic regulations. In my mind, our work is still quite far from reaching a clear direction in terms of social values.

The vicious circles on the ”left bank”

First let’s talk about the left bank of the bridge.

When I mention the term ”project”, I mean a specific solution to a certain social problem. As a fund official with two years experience, I hope to help certain groups to improve their current or future living conditions by supporting certain projects. More specifically, I am serving in an educational foundation, so the projects I am looking for are the ones that could use different ways to help fulfill the potential of disadvantaged groups. The projects may help them build up capacity and technology, so that in the future the quality of these groups’ life can be improved.

Hence, all my expectations towards the projects are based on the effect of the services they provide. When you judge whether a project is good or not, the core standard doesn’t lie in the activities or the form in which they are conducted. Rather, what really matters is whether it can meet the recipients’ needs and bring beneficial change. Take the most commonly-seen educational charity project, the reading project, as an example. Though the specific method of implementation varies from building a library in the countryside to helping rural teachers conduct reading courses, I always ask the project executive team two questions: first of all, what kind of improvements do you hope to give the kids through all these efforts? Secondly, why do you suppose that your methods can reach the expected goals?

Sometimes it is hard to get the project executive team to answer these two questions directly. I don’t want to get trapped in the debate on whether reading is the end or the means of study. What I really want to say is that, although more and more agencies and individuals are wholeheartedly promoting reading, agencies which can really explain reading’s value to children from the angle of scientific theory or actual facts are scarce.

In fact, I still hear many people say that they are promoting reading because children read too little, or that they are doing it for the good of the children because they find rural kids to be deserving of pity. But my challenges are: why is it so bad not to read that much? How and to what extent do you define “good” for kids? “Kids in rural areas are deserving of pity” is only the subjective judgment we outsiders make, but what are the children’s demands behind all this “pitifulness”?

I still remember once when I paid a visit to an agency, and I asked similar questions to find out the motives behind a project. I was told that this particular rural school had only one projector in the whole school, and it didn’t even have a laser pointer. In spite of all my understanding and sympathy, I had to say that it was an irrelevant answer. Besides the fact that projectors and laser pointers are not necessary conditions for improving educational quality, they also don’t reflect the real difficulties rural kids face. What lies behind this answer is the fact that they focus only on depicting ”poverty”. Neither the demands nor the potentials of the kids were taken into consideration by the project designers.

These sorts of situations are not uncommon, and they reflect the vicious circle that the public welfare sector has been working hard to break out of: we have been limited by the miserable surface of “poverty”, ”difficulties” and ”disasters”. But we don’t search for the strength and vision to break thoroughly through this surface. Unfortunately, if the goals and visions of charitable organizations are confined to the appearance of poverty and disaster, then the solutions provided will only be ineffective solutions attempted, or the act of quenching one’s thirst by thinking of plums.

The consequent result of this vicious circle is the core challenge which project officers are dealing with: really effective charity projects are still scarce. Less is more, so when they find promising projects and reliable project teams, funding officials truly feel like they’ve found a treasure! But this kind of mentality makes it hard for the fund management to reach the expectations of the foundations, because a good project will never be in need of money. It might be hard to imagine, but the specific difficulties funding officials can face even include the following: finding it hard to acquire accurate information regarding the bank account where the money should be deposited, and being unable to hand in reports because of their partners’ postponements.

But in most cases, as fund officials in pure grant-making foundations, we don’t face any pressure to raise funds. In other words, we don’t face any pressure to survive. Besides being distressed by the lack of good projects, what affects funding officials and grant-making foundations the most are the industry’s standards and the foundation’s internal challenges. So now we move to the “right bank” of the bridge.

Challenges from the “right bank”

Of course, on our name cards you will usually find the words ”project official” or “funding official”. However, we are not real officials. Most funding officials have very limited decision-making powers. Even though funding officials spend lots of time everyday talking about project design with different organizations, and in spite of the fact that they are the representatives who know NGOs best, our rights are limited to recommending a project to the board or the person in charge. Needless to say, the independence of mainland Chinese foundations and the legal requirements they face have also brought considerable limitations to sponsorship work.

First of all, the current laws and regulations contain requirements on how foundations should spend their money. For example, the payments which public fund-raising foundations make to support projects are regulated to be no less than 70% of their total revenue of the previous year, while non-public fund-raising foundations have to spend no less than 8% of the previous year’s account balance. These regulations force the fund officials to spend certain amounts of money. Even if there are no legislative regulations, the board of directors or the founders will have certain requirements regarding a foundation’s yearly expenditure in grants. But as I have just mentioned, good projects are scarce. Funding officials who want to spend money on the most preferable projects have to lower their project management standards and compromise on the executive teams. In private discussions between funding officials, there is no shortage of stories regarding good projects implemented by teams that refuse to comply with the requirements of the foundations.

Secondly, leaving aside the immaturity of those who execute the projects, the internal governance of foundations is not that satisfactory either. The improper pressure to spend money is just one aspect. Sometimes, fund officials may spend money on ineffective projects because of the uncertain targets of their foundations, or because of irrelevant targets such as brand marketing.

In terms of project management, the funding officials may be in a dilemma too. Taking the project reports as an example, funding officials have to hand in their project reports to higher authorities. However, if we invest in a small project for only 30000 Yuan a year, the recipient side may find it hard to provide frequent project and financial reports due to the small amount of resources involved. Even if the funding officials understand the situation clearly, they are still forced to press these requirements on the recipient organizations. The wide gap between the system’s requirements and the reality has caused increasing problems for grant-making officials.

This doesn’t mean there is no way out. Once I visited a small foundation in Hong Kong and I was really impressed by their work methods: they didn’t require fund recipients who only received small amounts to hand in frequent reports. Instead, they came to understand the projects’ conditions and help the recipients to build their capacity of project management. I do appreciate their efforts because they actually increase their own workload. Since this foundation has to raise funds from the public and other foundations, they need reports to prove their work from the recipients much more than we do. In Mainland China, on the other hand, most of the foundations make their own demands the priority. So grant-making officials always need to try and balance the requirements of their foundations and the NGOs’ particularities.

All these inner governance problems and the troubles brought about by the legal requirements are just the surface of the problem. What really restrains the development of foundations and the optimization of projects is the unclear and uncertain attitude we hold towards social problems. Previously, when I worked in project execution, I often refused to discuss so-called “values”. I paid more attention to doing something practical, and tried my best to avoid all kinds of empty talk. But now I realize that people who are doing something practical may focus on the present, but grant-oriented foundations should be concerned more about the long term. Usually a foundation will support several to several dozen projects of different scales. The standards and requirements they have for these projects should be set on the basis of the foundation’s vision and goals.

Looking at the problems with the project reports we mentioned earlier, if the greater goal of the foundations is to promote the development of the industry, then having strict requirements on NGO’s financial reports and other follow-ups is one of the ways to help grassroots organizations improve their work and management procedures. No matter how large the grants are, these requirements are within reason. If on the other hand the major goal of a foundation is to solve a certain social problem, then their funding officials could curtail their requirements on financial or other reports when they cooperate with the parties that carry out the projects. Instead, they could put more emphasis on the experience of the recipients. The small Hong Kong foundation I mentioned above understand quite clearly that its goal is women’s rights, so it puts all its emphasis on strengthening the knowledge and principles of grassroots women’s rights groups, rather than on their ability to write reports or manage funds.

The same principle can also be applied to the overall budget control of foundations, human resources management and other inner governance and project management problems. When funding officials are hesitating about the quantity and quality of reports, they should turn back and ask their leaders or their leader’s leader: what are our working goals? What is the social progress that we expect to see after all this work?

I think my arguments have been clear enough up to now. The grant-making officials of foundations, similar to every part of the philanthropic sector, are also restrained by the sector’s problems and the limitations of its system. Even though we have a certain amount of resources at our disposal, we can’t get out of the limitations of the whole system. We are only a bridge, and all our capacity depends on the support we get from both sides. If the two sides are unstable, then we are like water without a source, a tree without roots, and we can rightfully call ourselves the real disadvantaged group.